Covid-19 lockdown exposes Uganda’s poverty, inequality

Tuesday April 28 2020

Empty. An abandoned market at the New Taxi Park in Kampala. Many city dwellers who have been surviving on small scale businesses and living hand-to-mouth have been affected by the Covid-19 lockdown .PHOTO BY David Lubowa

In Summary

Economic challenge Before Uganda confirmed the first case of Covid-19, about a month ago, policy experts at the Finance ministry had simulated the likely impact on the economy. Like elsewhere, the government imposed a curfew and lockdown to bring the spread of the virus under control. But the lockdown has amplified existential crises such as unemployment, poverty and inequality, writes Frederic Musisi

Advertisement

By Frederic Musisi

We are all in this together’, has become a catchphrase around the world as a demonstration that the Covid-19 pandemic is affecting everyone in equal measure. It is a slogan that cuts across the political aisle, religion, government, and business.

The pandemic, whose global death toll is more than 200,000 has upended everyday life as we know it, confining most people in their narrow spaces—no work and restricted travel.

In conformity with World Health Organisation standards, public health experts have been preaching washing hands at least 20 times a day yet 51 per cent of Ugandans lack access to safe water and 82 per cent do not have access to improved sanitation facilities, according to the sanitation charity water organisation.

Generally, the health crisis has exposed numerous contradictions both in society and government policies, some of which were long known but ignored because they do not directly affect policy makers or those in power who are the affluent of society.

The health sector has long been ignored and chronically underfunded until a public health crisis set in. With the threat posing an existential threat, there is a chorus to improve funding towards the health sector.

After the first two weeks of the lockdown, which mainly shattered urban life, President Museveni late last month announced that food assistance would be given to the vulnerable poor in Kampala and Wakiso districts for one month as a short-term measure.

Also Read

In a subsequent address early this month, the President emphasised that the assistance should not be mistaken for the existential problem of chronic poverty that pushes most families to live on one meal a day.

“You cannot bring the long-standing problem of poverty which is not an emergency and has been around for a very long time,” he said.

The food distribution exercise, whose procurement by the Office of Prime Minister has already been mired by scandal and an ongoing corruption investigation, has so far gone well, albeit with numerous concerns and complaints of families being missed, and some family members not being catered for.

Distribution teams have been overstretched as they attempt to reach every starving household. Working with local area leaders, they go door-to-door to ascertain heads in a given family.

From one pandemic to another

When Uganda confirmed its first case of Covid-19, government sanctioned a lockdown to prevent the spread of coronavirus. But this brought businesses to halt and aggravated fault-lines such as poverty, income inequality and domestic violence among under-privileged families.

For a while, even before the pandemic, if one needed to witness poverty on a mass scale, they did not have to travel to northern Uganda where after nearly two decades war and despite the government and donors funneling billions to recovery programmes, the region’s poor people reduced marginally from 43.7 per cent in 2012/2013 to 32.5 per cent in 2016/2017, according to a 2018 Uganda Bureau of Statistics (Ubos) national household survey.

Nor did one have to travel to Busoga Sub-region in eastern Uganda, once a fulcrum of Uganda’s industry from textiles, steel mills, to agro-processing but went down the drain due to mismanagement and privatisation leaving behind an impoverished lot, with the highest poverty incidence of 35 per cent.

One just needs to stand atop any of the seven hills that make up Kampala and gaze at the expansive slums that cluster on drainage canals, marred in agonising chaos, and squalor whose inhabitants are mostly seasonal small vendors, domestic workers, hustlers, and others involved in odd jobs.

This spectacle is, however, not limited to Kampala and neighbouring Wakiso alone. All the other emerging towns in Mukono, Mbarara, Fort portal, Mbale, and others, are grappling with a similar crisis.

While the majority of Uganda’s 41 million population lived in rural areas, according to Ubod, with the accelerating but unplanned urbanisation between 2002 and 2014, the share living in urban areas increased by more than 50 per cent, from 12.1 per cent to 18.4 per cent.

The 2015 Poverty Status report by the Finance ministry placed the urbanisation rate at 23 per cent, and says this presents both opportunities and challenges for poverty.

“Over the last three years from 2009/2010 to 2012/2013, the urban population increased by 3.1 million from 4.6 million to 7.7 million,” the report indicates.

Business. A vendor sells oranges on Kampala Road on March 27. There is growing fear that the lockdown could increase poverty levels and widen the income inequality among the population. PHOTO BY David Lubowa

The report reveals that in rural areas where people are running away to towns, poverty reduction efforts had borne some fruits, “with poverty falling by almost two-thirds in the last two decades from 60.4 per cent.”

The reasons for these diametrical realities are complex, but the main driver seems to be the nature of the growth pattern, which fuelled a class-based social disconnect.

However, in a crisis like this one at hand, the urban poor, are both a security risk which explains government’s intervention with food relief, and according to the development charity Oxfam’s interim country director, Jane Ocaya, are among the most vulnerable during the crisis.

“Many of the people in urban areas earn from day to day but also have to support families in their rural communities, so in the wider scheme of things, the risk of vulnerability is spread,” Ms Ocaya says.

Nakawa Division, one of the five that make up Kampala City, according to a 2018 Ubos/Unicef/World Bank poverty map technical report, has the highest poverty rates in Kampala for both the total population (1.0 per cent) and among children (1.4 per cent), followed by Makindye Division and Kampala Central, while Rubaga Division, has the lowest poverty rates.

According to the city authority’s profile, the division has some 222,900 people living in informal settlements, with an average household comprising of between five and six people, in the slums of Banda, Bukoto 1, Butabika, Kinawataka, Mambo Bando Luzira, and Naguru.

The Nakawa Division MP, Mr Michael Kabaziguruka, says the constituency is home to some 500,000 people who fit the description of the ‘vulnerable poor’, mostly in the slum areas, who are eligible to the food aid.

Reality laid bare

The area being close to the Central Business District, it means, is home to thousands of people living by hand to mouth and others eking out a living from menial jobs, who are among the most affected by the lockdown.

But as the country continues to register more Covid-19 cases, fear is abounding that the lockdown could be prolonged or lifted partially, which will increase poverty levels and widen the income inequality gap, the situation compounded by a global economic meltdown.

The International Monetary Fund cautioned on April 14 that the meltdown will affect global economic growth “sharply negative” this year with a partial recovery possible only next year, while Oxfam International warned in a study early this month that the economic fallout would push an “extra half a billion people into poverty - 8 per cent of the world’s population - unless urgent action is taken.”

Dr Madina Guloba, a research fellow at Makerere University’s Economic Policy Research Centre (EPRC), says the computation of the lockdown and its effects will not be an easy task given the dynamics that existed already but the most critical thing is how long it [lockdown] will take.

“We cannot with certainty say the computations will be done easily in terms of getting the actual figures, of those who are going to be deepened into poverty or those who are sliding into poverty for the first time. At best, we can infer something about it,” Dr Guloba says.

What is worrisome, she adds, is that “as a country, we are part of a global chain”, and the longer the pandemic takes a toll on our trading partners/sources of development aid, it will dampen the mood locally.

“In urban areas, the levels of informality of business is high, and that is where the most vulnerability to poverty is. Then there is our middle class, which is largely fragile or shaky—mostly salarised workers whose employers are taking a hit, so if Covid-19 continues, their expenditure patterns will be affected, or will largely affect the informal sector,” she notes.

Long before Covid-19 and its debilitating effects set in, about two or three years ago, Uganda was receiving critical acclaim from development partners such as World Bank for its anti-poverty efforts. But widening inequality remained the country’s Achilles heel.

A 2016 World Bank Poverty Assessment Report for the period 2006 to 2013 described the country’s poverty reduction as a remarkable story and detailed that the proportion of the Ugandan population living beneath the national poverty line declined from 31.1 per cent in 2006 to 19.7 per cent in 2013.

“From 1993 to 2006, annual reduction in the national poverty rate of 1.9 percentage points a year resulted from the restoration of peace and stability to much of the country…” it further stipulates.

From 2006 onwards, the report noted that poverty reduction remained impressive—with the “national poverty rate falling by 1.6 percentage points per year and the international extreme poverty rate falling by 2.7 percentage points per year, the second fastest reduction in extreme poverty per year in sub-Saharan Africa during this time.”

Poverty, according to the Bank, is much more than the mere lack of money; it is about deprivation in other important areas of wellbeing such as education, health, water, and housing. It is defined as the lack or insufficiency of money to meet basic needs, including food, clothing and shelter. It can be measured in monetary terms based on the monthly (or annual) expenditure of a given individual. That expenditure is then compared to a threshold called the poverty line.

In the World Bank terms, someone is regarded poor if they live below the international extreme poverty line or purchasing power parity of $1.90 (Shs7,233) (designed to capture the average national poverty line among the world’s poorest countries).

But in local terms by Ubos, one is poor if they live on below $.097 and $1.97 (Shs3,692 and Shs7,498)—the latter basically whether a household consumes enough to meet their basic food needs.

What contributed largely to poverty reduction previously, especially among households, was agriculture, which accounted for 79 per cent of national poverty reduction from 2006 to 2013.

After the lockdown

Analysts have, however, projected that agriculture is unlikely to be affected by the current state of affairs both in short and medium term if the supply chain, in rural areas, remains stable and the climatic factors kept constant.

“If agriculture is not affected, then the number of people sliding into poverty will not be high,” Dr Guloba says, adding: “It is only those who depend on remittances from urban areas which have been hit by the crisis that we will see sliding into poverty, just like those in urban areas whose streams of incomes are linked to the outside world which is being affected.”

What is, however, likely to deepen on most fronts, Dr Guloba says is inequality, especially if government does not urgently put in place safety nets particularly those in precarious employment—both formal and informal, in urban areas, whose rise over the years have helped to drive poverty rates down.

Regardless, Ms Ocaya argues that the pandemic and its effects has already exposed a large section of the population’s vulnerability in such a situation “where most people both in formal and informal sector cannot work, and when the situations returns to normal, they are not certain about employment or will be underemployed.”

“On the whole, previously, we saw poverty reducing but inequality rising, especially on a regional perspective with Karamoja Sub-region and the northern and eastern regions lagging behind. Even in Kampala, we say poverty is reducing but step outside the townships and see the mismatch; so with this crisis, we will see both poverty and inequality as a reality,” he says.

Poverty, according to the Bank, is much more than the mere lack of money; it is about deprivation in other important areas of wellbeing such as Education, Health, Water, and Housing. It is defined as the lack or insufficiency of money to meet basic needs, including food, clothing and shelter

For example, between 2005 and 2009, for every three Ugandans who were lifted out of poverty, two fell back into poverty, demonstrating the fragility of the gains realised by the poorest households.

This, in part could explain that given the rosy poverty reduction statistics, the situation of optical analysis on the ground is quite different. But what is more, the World Bank indicates that “the low national poverty rate of 19.7 per cent is based on a poverty line that was set over twenty years ago and is now too low, and not reflective of a reality in which too many Ugandans live today.”

For now, there are no simple answers. Whereas the government has received glowing praise for its pragmatic steps to bring the spread of the virus under control, the proper assessment will be on its ability to combat poverty and inequality, which will likely grow two-fold during the aftermath of the pandemic.

But without a robust team of medical personnel and properly equipped hospitals in place, there are fears that other interventions to resuscitate a battered economy could be in vain.

Poverty rate

Margins. On the countrywide scale, Kampala is rated with the lowest poverty rates of 0.7 per cent of the total population, and out of the poverty rate for the central region of 7.8 per cent. Across the country, 19.7 per cent of the population was said to be below the national poverty line.

UBOS findings

Sector performance. The last national census by Ubos detailed that nearly two thirds (64 per cent) of the working population is engaged in subsistence agriculture.

Professionals accounted for less than one per cent, technicians and associate professional workers were less than 2 per cent, while paid employees and other forms of work were mainly in the subsistence agriculture sector placed above 50 per cent.

Urbanisation was the second contributing factor to poverty reduction, accounting for one tenth given the strong welfare gains from rural to urban migration.

Other gains from urbanisation include activities such as petty trade and informal manufacturing that help reduce underemployment and stabilise household incomes, even if productivity and hourly earnings are often low.